Chicago

Housing development without displacement

By ED McMANUS

THERE'S a touch of irony in the fact that the offices of the Chicago Rehab Network are in the Loop: The whole focus of the organization is anti-Loop. For years it has been trying to persuade the city to stop spending so much of its federal community development money downtown and instead to pump it into the neighborhoods.

But downtown, after all, is where the money is — in the banks, at the local office of the U.S. Department of Housing and Urban Development and at City Hall. And the network, a coalition of groups dedicated to improving low-income housing in their communities, needs money.

Although the federal government is the original source of a great part of the funds the network obtains, the money is funneled through City Hall, and that's been a problem in the past. Mayor Bilandic and Mayor Byrne, and before them Mayor Daley, weren't too big on housing. Such city departments as public works and streets and sanitation received a bigger share of the community development dollar than housing. Contrary to the intent of the block grant program, the emphasis was on big capital improvements.

All that changed after Harold Washington became mayor in 1983, says Bill Foster, director of the rehab network. This year, the Department of Housing received far and away the largest chunk of Chicago's community development funds. So housing rehabilitation in Chicago is booming, even in the face of Reagan administration budget cuts. "Federal resources are dwindling," says Foster, "but a greater proportion of the dollars that are available here are going into the neighborhoods, and especially into housing." Chicago, he says, now is "head and shoulders above every other city in the country in terms of low-income housing development."

The rehab network has been intimately involved in Chicago's low-income housing for nearly a decade, and its track record is impressive. Its primary mission is to provide technical assistance to its 26 member groups for fixing up housing in their neighborhoods. One thousand units were in the process of being rehabbed in the past year.

The way it works is that a group comes to the network with a concept: The group has its eye on a rundown piece of property it would like to buy and develop. The network's 11-person professional staff makes an initial assessment of the viability of rehabbing the building and the group's ability to carry out the project. Then a loan is arranged, usually through both a bank and the city.

'Chicago is now head and shoulders
above every other city in terms of low-income
housing development'

Next, the network's architects assist the group in drawing up construction plans, and a network accountant helps the group draft a budget and set up bookkeeping. Finally, a new member of the staff, "tenant training" specialist Anne Conley, moves in and trains the tenants of the newly remodeled building in the skills of managing a building, so that they can replace the officials of the community group, most of whom have no desire to act as landlords. In many cases the buildings are turned into co-ops.

A major project of the network is its neighborhood lending program, which arranges low-interest financing for the purchase and rehabilitation of the buildings through three participating banks — the First National, Harris Trust and Northern Trust. The banks have made $17 million in loans in the last year and a half, and the city has provided an additional $12 million on projects for which enough money wasn't available through a bank.

Yet another project of the network involves tax-delinquent buildings. Cook County has contracted with the network to administer a program under which groups can obtain title, at virtually no cost, to buildings whose owners have failed to pay taxes. As a result of the last so-called scavenger sale of such properties, network groups have acquired 300 units of housing and are in the process of rehabbing them. Foster says that the network would be willing to set up similar programs in other counties in the state.

The network this year received $175,000 in operating subsidies from the city — about one-third of its budget. The other two-thirds comes from corporations and foundations.

The network's slogan is "Development without Displacement." Most of the buildings it rehabs are vacant; once rehabilitation is done, the buildings are made available to residents of the neighborhood, not "yuppies" from elsewhere in town looking for a trendy apartment, says Foster.

The "tenant training" that Conley does is a key element of the network's programs. "I really believe that empowerment of people begins with being in control over at least a part of our lives and having the skills to fully exercise that control," says Conley. "Developing affordable housing for low-income people is a good first step in empowering people. But unless the next step is turning over control of management to the people who live in the buildings, there isn't any empowerment. "

August & September 1986/Illinois Issues/73